The chart construction has clearly deteriorated for the bulls. On the every day chart, Nifty had been buying and selling inside a “Rising Channel” sample since Might. Nevertheless, this week’s breakdown beneath the channel’s decrease boundary confirms a bearish reversal. Importantly, this breakdown is accompanied by a bearish hole, which qualifies as a “Breakaway Hole”, including additional conviction to the bearish setup. Moreover, the index has damaged beneath the 50-day EMA, a degree that had beforehand supplied robust help.
With this, analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Analysis, SBI Securities interacted with ET Markets concerning the outlook on Nifty and Financial institution Nifty for the upcoming week. Following are the edited excerpts from his chat:
Lets begin together with your view available on the market. How do you see the market today?
The benchmark Nifty index has continued its downward trajectory, extending its dropping streak for the fourth consecutive week. This persistent weak point might be attributed to a mix of things — the absence of robust optimistic triggers, Q1 earnings from key corporates coming beneath expectations, and lingering uncertainty on the worldwide commerce deal entrance, all of which have dampened investor sentiment.
In the course of the week, the index made a feeble try to rebound from the essential help zone; nevertheless, the restoration lacked conviction and fizzled out shortly. On Wednesday, Nifty managed to shut above its 20-day EMA, briefly reviving hopes of a turnaround. However the optimism was short-lived, as renewed promoting stress dragged the index again into unfavorable territory.
The bearish undertone deepened on Friday, when the index decisively broke beneath two crucial technical ranges — the 50-day EMA and the 61.8% Fibonacci retracement of its latest upswing from 24,473 to 25,669. This breakdown not solely displays fading bullish momentum but in addition indicators rising nervousness amongst market individuals. With no clear optimistic cues on the home or world entrance, the market seems susceptible to additional consolidation or draw back within the close to time period.
Speaking about essential ranges, the 100-day EMA zone of 24,600-24,550 will act as fast help for the index. Any sustainable transfer beneath the extent of 24,550 will result in additional correction upto the 24200 degree. Whereas on the upside, the 20-day EMA zone of 25,100-25,150 would be the essential hurdle for the index.
How has the earnings season been to date? Does it appear to be it’s going to solely push the market down?
The earnings season to date has largely fallen in need of expectations, with a number of main firms reporting weaker-than-anticipated outcomes. This underperformance has dampened investor sentiment, particularly at a time when markets had been hoping for robust earnings to behave as a key catalyst for upward momentum. Past earnings, the absence of any important optimistic home triggers and the continued uncertainty surrounding world commerce negotiations have added to the cautious temper. These mixed components are contributing to the downward stress available on the market. Whereas weak earnings alone will not be the only real purpose for the market correction, when coupled with world headwinds and a scarcity of contemporary shopping for triggers, they actually add weight to the bearish undertone prevailing within the present setting.
What is the tackle Nifty Financial institution now?
The banking benchmark index, Financial institution Nifty, has comparatively outperformed the broader frontline indices by closing the week on a mildly optimistic notice, whilst the general market sentiment remained weak. All through the week, the index tried to stage a restoration from decrease ranges, supported by selective shopping for in heavyweight banking names. Nevertheless, it as soon as once more struggled to surpass the horizontal trendline resistance (57,300-57,400), which continues to behave as a formidable barrier for the bulls.
Regardless of the intraday makes an attempt to interrupt out, the index confronted promoting stress close to resistance zones and finally retreated from greater ranges. By the top of the week, Financial institution Nifty settled close to the 56,500 mark, registering a modest acquire of 0.44%.
From a technical standpoint, the weekly value motion has resulted within the formation of a Headstone Doji candlestick sample, which generally indicators indecision out there and a possible reversal when it seems after an up-move. This sample, coupled with the repeated failure to breach resistance, suggests warning within the close to time period, with the necessity for a powerful breakout to renew upward momentum.
Going forward, the zone of 57,300-57,400 is prone to proceed to behave as a vital hurdle for the index. Whereas on the draw back, the zone of 56,200-56,100 will act as essential help for the index as it’s the confluence of the 50-day EMA and prior swing low. Any sustainable transfer beneath the extent of 56,100 will result in additional promoting stress within the index upto the extent of 55,500 within the brief time period.
How does Bajaj Finance take care of Q1 outcomes?
Following the Q1 earnings announcement, Bajaj Finance witnessed a pointy gap-down opening on Friday, reflecting a unfavorable market response. The inventory has damaged beneath key help ranges, particularly the 20-day and 50-day EMA, each of which have now began to slope downward, indicating rising bearish stress. Moreover, the every day RSI has breached an upward sloping trendline, suggesting a lack of momentum and a possible continuation of the downtrend. Given these technical indicators, the inventory is prone to commerce with a unfavorable bias within the coming weeks until it manages to reclaim key shifting averages with robust volumes.
One other fascinating inventory today is IEX. What can be your tackle IEX after the complete market coupling state of affairs?
IEX has come underneath important promoting stress following the information surrounding market coupling, witnessing a pointy decline of almost 29% previously week alone. This steep correction displays heightened investor concern over the potential regulatory influence on its enterprise mannequin. From a technical standpoint, the inventory has clearly entered a powerful downtrend, having damaged beneath each its short-term and long-term shifting averages on every day in addition to weekly charts. This breakdown throughout a number of timeframes additional strengthens the bearish outlook. Moreover, the every day and weekly RSI has slipped beneath the 40 mark and continues to pattern decrease, indicating weakening momentum and a scarcity of shopping for curiosity. Except there’s a important reversal in sentiment or a powerful technical bounce, the inventory seems poised to proceed its downward trajectory within the close to time period.
What do you suppose can help the market now? Any optimism in sight?
At this stage, any optimistic improvement on the worldwide entrance, notably round commerce negotiations involving the US, might act as a much-needed catalyst for the market. A constructive consequence and even indicators of progress in commerce talks would assist ease investor issues.
Which sectors are you targeted on now?
The Nifty IT index witnessed a pointy correction final week, tumbling by over 4%, marking its third consecutive weekly decline. The index has been persistently underperforming the broader market and frontline indices. Technically, it continues to commerce beneath its key shifting averages, indicating persistent weak point. Furthermore, the every day RSI has entered the tremendous bearish zone, reinforcing the unfavorable momentum. Given these technical indicators, the index is prone to lengthen its southward journey over the subsequent few buying and selling classes.
In the meantime, the Nifty CPSE index has damaged down from a 33-day consolidation vary on the every day chart, triggering a contemporary wave of promoting stress. Within the course of, it has additionally slipped beneath each its 20-day and 50-day EMAs. Notably, the every day RSI has fallen beneath the 40 mark for the primary time since February 2025, additional signaling weak point. These technical developments counsel the index might proceed its downward trajectory within the close to time period.
As well as, a number of different sectoral indices — together with Nifty India Defence, Oil & Fuel, FMCG, Media, PSE, and Realty — are exhibiting indicators of continued weak point and are anticipated to stay underneath stress within the brief time period.
On the brighter facet, Nifty Healthcare and Nifty Pharma indices are exhibiting relative power and are prone to outperform within the close to time period, supported by secure value buildings and bettering momentum indicators.
Any shares inside these sectors?
Technically, Cipla, Shyam Metalics, Apollo Hospital, Jindal Metal, CSB Financial institution, and PGEL are prone to outperform within the brief time period.
(Disclaimer: Suggestions, recommendations, views and opinions given by the consultants are their very own. These don’t characterize the views of The Financial Occasions)
